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Frederik Ducrozet highlights a significant setback for the European Central Bank due to an unexpectedly bad inflation report. Services inflation rose by 50 basis points, sharply exceeding both national data and ECB staff projections.
Ducrozet points out that while this spike is likely to be reversed, the data will keep ECB officials vigilant, especially in advance of an imminent rate hike next week.
Ducrozet recently observed that Norges Bank became the third G10 central bank to raise interest rates during this cycle, following moves by the Bank of Japan and Reserve Bank of Australia. He has also noted that debates on Bank of England rate cuts have faded as the war shifts focus to other economic concerns. Norges Bank’s latest hike and the change in BoE rate cut discussions reflect the diverse challenges facing central banks.